XIRR Calculator — Return by Exact Dates

What the calculator does and when to use it

XIRR answers the question "what annual return did I actually achieve" when money enters and leaves on arbitrary dates. Ordinary internal rate of return assumes flows arrive at equal intervals, year after year. Reality rarely cooperates: one contribution lands in January, the next in July, a partial withdrawal happens the following March, and the final valuation comes in June a year later. A contribution made early in the year works almost twelve months longer than one made at the end of it, and that fact moves the result noticeably.

Use the calculator for an investment portfolio with irregular top-ups, for a programme of regular fund purchases, to track the real return on a company stake paying irregular dividends, or for a project with staged financing. The result is an annual rate, so it compares directly with a deposit rate, a bond coupon or an index return — even though the underlying movements fall on arbitrary dates.

The formula and what each variable means

The condition matches IRR, except that time is measured in days rather than whole periods: the sum of all flows, discounted at rate r over the exact elapsed term, must equal zero.

• CFᵢ — cash flow number i. Negative when you put money in, positive when you take money out.
• dᵢ — the exact date of flow CFᵢ.
• d₀ — the date of the first flow. All other dates are measured relative to it.
• (dᵢ − d₀)/365 — elapsed time in years, calculated as the day count divided by 365. This fraction replaces the whole-number exponent t from the ordinary IRR formula.
• r — the annual return being solved for.

The equation has no closed-form solution and is solved iteratively, exactly as with IRR: try a rate, compute the sum of discounted flows, then adjust the rate up or down according to the sign until the sum approaches zero. The only difference is the exponent — instead of 1, 2, 3 years, it holds fractions such as 0.4986 or 2.4575.

A worked example

You invest in a fund on the following schedule: on 15.01.2024 you contribute €10,000, on 15.07.2024 you add another €5,000, on 10.03.2025 you withdraw €2,000, and on 30.06.2026 you sell everything for €15,500.

The iteration: at a rate of 0% the sum is simply the net profit, +€2,500.00. At 5% it falls to +€759.58, at 7% it is +€141.70, and at 8% it turns to −€152.29. The sign flips between 7% and 8%, and refinement lands on 7.48% per year.

Compare that with the naive alternatives. You put in €15,000 and took out €17,500, a total gain of 16.67% — a figure that says little on its own because it is not tied to time. Split the period into four notional annual steps and apply ordinary IRR and you get 6.22%. Compute a plain average annual return over the 2.46 elapsed years and you get roughly 6.47%. Both understate the real outcome, because neither recognises that the second contribution worked for only two years rather than the full period.

Practical guidance

Signs are the most common source of error. The rule is simple: money that leaves you and goes into the investment is negative; money you receive — withdrawals, dividends, sale proceeds — is positive. To measure your return to date, add a final row with today's date and the current market value of the portfolio as a positive amount, as though you were selling right now.

Include commissions and fees. If a purchase cost you €10,000 plus a €50 fee, enter €10,050. If a sale netted you €15,500 after deductions, enter exactly that net figure. On small amounts with frequent trades, the gap between gross and net return is substantial.

For a Bulgarian investor the tax angle matters when interpreting the number. Personal income tax is a flat 10%. Gains on the disposal of financial instruments traded on a regulated market in the EU or EEA are exempt for individuals, which means gross and net XIRR coincide for those instruments. For instruments outside that scope, and for dividends, the treatment differs — check the current rules for your specific case.

Limitations and when to use a different calculator

XIRR inherits the core assumption of IRR: that every interim receipt is reinvested at the same rate. At moderate figures the assumption is acceptable; at very high ones it is not.

The result is sensitive to the closing valuation. If the final row is a current market value rather than an actual sale, XIRR reflects an unrealised gain the market can take back tomorrow. Over short periods — under a year — annualisation exaggerates: two weeks at a 1% gain produce an impressive annual rate with no practical meaning.

The calendar introduces a small imprecision as well. The 365-day convention ignores leap years and, over long horizons, creates a discrepancy in the order of hundredths of a percent — negligible in practice, but it explains why different platforms show slightly different figures.

When to switch calculators: if your flows arrive exactly once a year, ordinary IRR is sufficient and quicker to enter. If you have one amount at the start and one at the end with nothing in between, use CAGR. If you contribute a fixed amount at regular intervals and want to project a future result rather than measure a past one, use the future value of regular contributions calculator.